Bill Wallace, owner of a car dealership chain in Florida, stated that most customers recently inquire about hybrid cars – vehicles combining gasoline and electric power – amid soaring gas prices in the US.

Wallace owns 16 dealerships. While staff at Hyundai, Kia, and Mazda stores are busy with customers, his Chevrolet and Cadillac showrooms, General Motors' (GM) mainstream and luxury brands, are quiet. Despite a diverse electric vehicle portfolio, GM offers only one hybrid model, the Corvette sports car.

Reuters observed that GM is on the sidelines of the booming hybrid wave. The company invested billions of USD in electric vehicles, and is now witnessing consumers flocking to hybrid cars.

The Middle East conflict, which occurred in late February, pushed gasoline prices up by about 40%, leading to a surge in American demand for hybrid vehicles. In August, these vehicles captured a 19% market share, significantly outperforming pure electric vehicles' 7% share. This means one in five cars sold was a hybrid.

Monthly market share of hybrid and electric vehicles, from 1/2019 to present. Source: JD Power/Reuters

Hybrid vehicles are accelerating past gasoline-powered counterparts. According to data from market analytics firm JD Power, in QII, the growth in hybrid vehicle sales at dealerships was more than double that of internal combustion engine vehicles.

Loren McDonald, CEO of EV market analytics firm Chargeonomics, believes hybrids have won over Americans due to their low price difference compared to gasoline cars and the ease of estimating fuel savings. "Most importantly, they don't require users to change any driving habits, other than needing fewer trips to the gas station", he said.

For GM, the executive board has long maintained that hybrids represent a costly and complex investment. CEO Mary Barra once referred to hybrids as a "temporary green solution". The automaker prioritizes electric vehicles, with a firm belief that the market will shift towards truly green transportation.

By late 2024, recognizing that electric vehicle sales were not growing as anticipated, GM expressed its intention to introduce plug-in hybrid (PHEV) models to the North American market by 2027. PHEVs are plug-in hybrid vehicles with large battery capacities, capable of extended all-electric range.

Regarding hybrid vehicles, sources from suppliers and market forecasting firms suggest that GM may not sell them in the US until the end of the decade. GM declined to comment on this information.

GM's plant in Lansing, Michigan, US. Photo: GM

In reality, many automakers have also encountered difficulties with electric vehicles. After Donald Trump took office, the US government eliminated EV incentives and blocked regulations to phase out gasoline cars before 2035 in over a dozen states, including California. Ford halted production of most battery-electric models late last year, accepting a 19,5 billion USD loss. However, they still retain many hybrid models as a contingency.

Toyota Motor pioneered hybrid technology with its Prius model from the late 1990s. In the first half of this year, for the first time, Toyota's electrified vehicle sales (primarily hybrids and some pure electric vehicles) accounted for more than half of the company's total sales.

In the small SUV segment, the number of new hybrid models has surged, including the Toyota RAV4 and Honda CR-V. Nissan also expedited the launch of its Rogue hybrid version several months ahead of schedule. In contrast, GM only supplies gasoline-powered small SUV versions, such as the Chevrolet Trax and Buick Envista.

In the first half of this year, GM's market share in the US decreased to 16,8% from 17,6% in the same period last year. Meanwhile, hybrid leaders Toyota and Honda recorded substantial growth.

David Ferraez, a GM dealer in New Jersey, stated that dealerships are hesitant to acquire more electric vehicles because they are difficult to sell. "I hope GM can adapt and find a way to produce hybrids", he said.

In a conversation with Fortune last week, GM CEO Mary Barra stated that in response to every market signal, they need to consider "no-risk" or "no-regret" decisions and prepare business scenarios. She also emphasized that for a business, flexibility must be coupled with foresight. "Electric vehicles remain the ultimate destination", she said.

Bao Bao (according to Reuters, Fortune)